Question

The city council wants to curb smoke emissions by 50 percent. to accomplish this, it requires each firm to curb its emissions by 50 percent. what will be the increase in total cost to society due to this policy?

Answer 1

The increase in total cost to society due to the policy of curbing smoke emissions by 50 percent would be approximately $19,000,000.

Step-by-step explanation:

To calculate the total cost to society due to the policy of curbing smoke emissions by 50 percent, we need to consider the cost incurred by each firm and the benefits gained by the residents.

Let's assume there are 10 firms in the city. If each firm is required to curb its emissions by 50 percent, they will have to invest in pollution control measures, which will increase their cost. Let's say each firm incurs a cost of $100,000 to comply with the policy. So, the total cost for all 10 firms would be $1,000,000.

On the other hand, if there are 100,000 residents in the city, and each resident benefits by $200 from reduced smoke emissions, then the total benefit to society would be $20,000,000.

To calculate the increase in total cost to society, we subtract the total benefit ($20,000,000) from the total cost ($1,000,000), which gives us $19,000,000. Therefore, the increase in total cost to society due to this policy would be $19,000,000.